EXCLUSIVE-US approval of BP refinery sale to Tesoro seen imminent

Fri May 17, 2013 4:53am IST

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* Deal will make Tesoro second-largest Calif. refiner

* BP Arco station owners told sale could happen by June 1

* Antitrust approval could come as early as Friday -source (Adds refining capacities, no comment from Calif. AG)

By Erwin Seba and Diane Bartz

HOUSTON/WASHINGTON, May 16 (Reuters) - Independent western U.S. refiner Tesoro Corp may take ownership of BP Plc's 240,000 barrel per day (bpd) refinery in Carson, California, as early as June 1, sources familiar with the transaction said on Thursday.

Other sources told Reuters that the U.S. Federal Trade Commission, which assessed the deal to ensure that it complied with antitrust law, is prepared to approve the purchase within days.

That approval could come as early as Friday, said one source with knowledge of discussions between the company and the agency. It was not known if the FTC will place conditions on the deal's approval.

The sources could not speak for attribution, citing the need to protect business relationships. A BP spokesman declined to discuss the transaction.

Tesoro announced last August that it had agreed to buy BP's Carson plant for $2.5 billion. The proposed deal has been awaiting approval by the FTC and by California's attorney general.

The sale includes an 800-station retail network and distribution and storage assets.

Assuming the Carson refinery purchase is approved by the FTC without conditions, Tesoro would become the second-largest refiner in California after Chevron Corp. California is the largest gasoline market in the United States.

Adding the Carson refinery to Tesoro's other two California refineries would give Tesoro a combined crude oil throughput of 509,800 bpd, or 26 percent of the state's refining capacity, according to data published by the U.S. Energy Information Administration.

Chevron's two California refineries have a combined throughout of 521,271 bpd, or 26.7 percent of the state's crude oil refining capacity.

In recent days, owners of BP Arco-branded retail stations in California have been told to expect a change to Tesoro as early as the first day of June. "June 1, that's the date for Tesoro to take over," one of the sources said.

Once the transaction is cleared, BP's U.S. downstream operation will be solely focused on refineries in the northern continental United States, where cheaper Canadian crude oil is easily obtained.

A Tesoro spokeswoman declined to discuss the status of the deal.

"As previously communicated, we expect the transaction to close before mid-2013," said Tina Barbee, who declined to elaborate.

An FTC spokesman declined on Thursday to discuss the status of the commission's review of the transaction. On May 2, Tesoro Chief Executive Greg Goff said the company was near the end of the regulatory review process.

A spokeswoman for California Attorney General Kamala Harris declined to comment on the pending sale.

In addition to the refinery and retail network, the sale includes more than 100 miles of pipeline, three marine terminals, four land storage terminals and four product marketing terminals.

Tesoro plans to sell the distribution and storage assets to its master limited partnership, Tesoro Logistics LP, for about $1 billion, within a year of closing.

Tesoro also intends to combine operations of the Carson refinery with its 103,800 bpd refinery in Wilmington, California. The two refineries nearly abut each other in the Los Angeles industrial suburbs north of the port of Long Beach.

BP in 2011 announced plans to sell the Carson refinery as well as its Texas City, Texas, refinery. Marathon Oil Corp purchased the Texas refinery in February as part of a $2.4 billion deal that includes terminals, pipelines and other assets. (Reporting by Erwin Seba in Houston and Diane Bartz in Washington; Editing by Gerald E. McCormick, Tim Dobbyn, Matthew Lewis and Steve Orlofsky)

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